Budgets

What is Budgets module?

The Budget Module in XoroERP is a powerful tool designed to help businesses set, manage, and control their financial budgets effectively. This module is crucial for maintaining fiscal discipline and supporting strategic financial planning. It offers features that not only help in managing expenses but also in creating detailed financial reports through the use of Accounting Dimensions.

To access the Budget module, go to Menu > Planning > Budgets > Budget

Key Features of XoroERP's Budgets Module

1. Budget Setting and Management:

   • Expense Control: The Budget Module allows you to set specific limits on your expenditures, enabling effective monitoring and management of your financial outflows. This ensures that your expenses remain within predefined limits.

   • Financial Planning: By setting up budgets, you can plan for future financial periods. This helps you align your spending with your revenue targets and overall financial strategy, ensuring that your finances are managed prudently.

2. Strategic Planning:

   • Revenue and Expense Forecasting: When planning for the upcoming financial year, you can establish revenue targets and set corresponding expense budgets. This ensures that your expenditures are aligned with your income projections, preventing overspending and promoting financial stability.

Creating a Budget in XoroERP

To create a budget in XoroERP, you need to fill out specific fields. Here is an explanation of these fields:

Budget Header Fields:

1. Fiscal Year*: Specify the financial year for which the budget is being created. This helps in organizing and tracking budgets based on the fiscal timeline.

2. Budget Name*: Assign a unique name to the budget. This helps in easily identifying and referencing the budget.

3. Period: Define the period for which the budget is applicable. This could be monthly, quarterly, or annually, depending on your business requirements.

4. Description*: Provide a brief description of the budget. This field is useful for adding notes or comments about the budget's purpose or scope.

5. Budget Accounts Type*: Select the type of accounts that the budget will cover. This ensures that the budget is applied to the correct financial accounts.

6. Budget Sub Type*: Specify any sub-categories or specific details related to the budget accounts. This adds a layer of detail to the budgeting process.

Budget Sub-Types

In XoroERP's Budget module, you can define budgets across different dimensions using specific budget sub-types. These sub-types help categorize and manage budgets based on different criteria:

1. Customer:

   • Description: This budget is tailored for individual customers, allowing you to allocate and track spending or revenue targets specifically for each customer. It’s useful when you want to manage customer-specific financial goals.

   • Usage: Ideal for businesses that need to monitor financial performance on a per-customer basis.

2. Overall:

   • Description: This represents the total budget for the entire system, encompassing all departments, stores, or customer accounts. It provides a holistic view of your financial limits and helps in global financial planning.

   • Usage: Suitable for overarching financial control and monitoring of the entire organization’s budget.

3. Store:

   • Description: This budget type is designed for individual stores or branches within the organization. It allows for the allocation of funds or setting of financial targets for specific locations.

   • Usage: Useful for businesses with multiple locations, ensuring each store operates within its allocated financial resources.

Important Note: These budget sub-types in XoroERP serve as reference points for categorizing and managing your budgets. However, the system does not enforce budgetary limits based on these sub-types, meaning it will not generate warnings or prevent transactions if the actual figures exceed the defined budget. This flexibility allows users to maintain control over their financial planning without strict enforcement.

Fields marked with Asterix* are mandatory fields.

Create Budget: After all the mandatory fields are filled in, click on this button to create a budget.

Budget Sub Header:

1. Select Budget: This dropdown allows you to select the budget year. It helps in linking the budget to the appropriate fiscal year.

1. Update Accounts: This allows you to update the accounts missing in the budget.

Budget tabs

1. General Ledger: Select the general ledger for the chosen year such as Bank, Undeposited Funds, Account Receivable, Inventory, Prepayment, and so on. This ensures that all budget entries are recorded accurately in the financial accounts.

2. Account: Enter the name of the account for which the budget is being created. This helps in associating the budget with specific financial accounts.